How Has the First Marijuana ETF Performed in the Last 6 Weeks?

The marijuana industry has truly been something special this year.  For starters, Canada became the first industrialized country in the world to legalize recreational cannabis on Oct. 17. When the industry is fully up to speed, Wall Street believes it could be generating in excess of $5 billion in annual added sales, atop what it was already bringing in from medical weed sales and exports to medically legalized foreign countries.

Aside from Canada’s making history, two new states — Missouri and Utah — have joined the ranks of the medically legal in the United States. Meanwhile, residents of Michigan voted to become the 10th state to legalize adult-use pot during midterm elections. We’ve also seen many of the largest marijuana deals in history in 2018, as well as the first cannabis-derived drug approval in the United States. As I said, it’s been a special year…

This popular cannabis ETF is plunging

Yet what might be described as the most encompassing measure of success for marijuana stocks, the Horizons Marijuana Life Sciences Index ETF (NASDAQOTH:HMLSF), has been pummeled as of late. Currently holding 49 different pot stocks, including growers and ancillary players, the Horizons Marijuana Life Sciences ETF has lost a third of its value in less than six weeks.

Mind you, longer-term investors in this exchange-traded fund aren’t exactly hurting. Shares of the ETF are up 80% since inception in Canada, and 66% since being listed on the over-the-counter exchange in the United States. But these same investors are down 27% year to date (in the U.S.), and have seen a third of their investment disappear in just over a month. These results are particularly disappointing since the decline almost perfectly correlated with the legalization of recreational pot in Canada.

So what the heck has suddenly happened that marijuana stocks, and the very first marijuana ETF? If you’re looking to point the finger of blame, place it on…

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